Bitcoin (BTC) price analysis 10 Jan: time to buy again?
Bitcoin (BTC) could witness a relief rally as the bulls rush in
Bitcoin witnessed six days of successive fall from 2 to 7 January, which was the worst losing streak since 2018. The sentiment soured and bitcoin broke below the strong support on 5 January after the release of minutes from the US Federal Reserve’s December meeting.
The minutes said that the majority of “participants agreed that it would likely be appropriate to initiate balance sheet runoff at some point after the first increase in the target range for the federal funds rate.”
The news of the internet shutdown in Kazakhstan, the second-biggest bitcoin mining hub, did not help matters either. Coinbaseinstitutional analysts said in a weekly update on 7 January: “Macroeconomic uncertainty has led to relatively low conviction from market players,” Coindesk reported.
However, the recent correction in bitcoin and most major altcoins does not seem to have altered the bullish view of Bloomberg Intelligence analyst Mike McGlone. In a recent market analysis, McGlone said that bitcoin has strong support at $30,000 and ether at $2,000. He forecasts that bitcoin will reach $100,000 and ether will rise above $5,000 in 2022.
Not everyone is bullish on the prospects of bitcoin, however. Veteran trader Peter Brandt tweeted that bitcoin has violated its parabolic advance, which is a negative sign.
Could crypto markets extend their correction or will bitcoin go up and start a strong recovery? Read our BTC price analysis to find out.
Bitcoin price technical analysis: weekly chart
BTC’s price extended its downward move last week, dropping 11.45% over the previous week’s closing price to finish at $41,879.60. The moving averages are about to complete a bearish crossover, indicating that bears are firmly in the driver’s seat.
However, the buyers are unlikely to give up easily. They will step in and attempt to defend the support at $39,565.25.
If the next relief rally turns down from the 20-week exponential moving average (EMA), it will suggest that sentiment remains negative and traders are selling on rallies. That will increase the likelihood of the continuation of the downward move.
If the price sustains below $39,565.25, the BTC/USD pair could extend its decline to $28,639.70.
What is your sentiment on BTC/USD?
This negative view will invalidate if the price turns up from the current level and breaks above $52,122.15. The bulls will then attempt to push the price back toward the all-time high of $69,055.
The bitcoin price analysis shows that bears are in command but the bulls are likely to attempt a recovery in the next few days.
Bitcoin price technical analysis: daily chart
BTC’s price broke below the strong support at $45,462.90 on 5 January, indicating the continuation of the downtrend. The pair formed a Doji candlestick pattern on 8 January and the relative strength index (RSI) was close to the oversold zone, suggesting that the selling pressure could be exhausting.
The relief rally could now reach the breakdown level of $45,462.90. If bulls push the price above this resistance, the next stop could be the 50-day simple moving average (SMA). A break and close above this resistance could suggest that the downtrend may be over.
Contrary to this assumption, if the price turns down from $45,462.90, it will suggest that bears are selling close to this level. The pair could then drop to $39,565.25. A strong rebound off this support could keep the pair range-bound between $39,565.25 and $45,462.90 for the next few days.
The bears will have to sink and sustain the price below $39,565.25 to start the next leg of the downtrend.
Bitcoin: buy or sell at current levels?
The bitcoin price analysis suggests that bulls are trying to start a relief rally but the recovery is likely to hit a wall at $45,462.90. If the price turns down from this level, the prospects of the continuation of the downtrend increase. The first sign of strength will be a break and close above the 20-day EMA.
The views and opinions expressed in the article are those of the author and do not constitute trading advice. Trading and investing involve substantial risks and you should do your own research or contact your financial adviser before arriving at a decision.